How Air New Zealand boss Greg Foran has prepared for the hot seat

Air New Zealand Chief Executive Greg Foran. Photo / Supplied

Incoming Air New Zealand boss Greg Foran officially starts on Monday - after weeks of burying himself in the business and learning about an industry that's brand new to him.

The retail veteran moves into the top floor at the airline's Fanshawe St headquarters in Auckland just as the airline industry faces its latest big threat - coronavirus or 2019-nCoV. It is a danger which could have grave consequences if it becomes a full-blown global pandemic.

The industry has been here before over the last 17 years, and the Sars epidemic of 2003 was the most lethal and economically destructive for airlines. But airlines that are in good financial shape when a crisis hits – and those crises can take many forms - bounce back relatively quickly.

Foran is moving into a company that has had a stable investment-grade credit rating for years, has been in super-profit territory recently and has a extremely capable senior executive and operational teams used to dealing with the unexpected.

Unlike his two immediate predecessors, the former Walmart US boss is a complete newcomer to airlines.

While Christopher Luxon had forged a big career at Unilever in North America, he had for a year headed Air NZ's international airline. He succeeded Rob Fyfe, a former Air Force engineer who had then risen (rapidly) through the airline's executive ranks.

Air NZ chief executive Greg Foran (in yellow vest) with staff. Photo / Supplied

Foran's career has been well documented, but just what he has gleaned from ''looking inside the cowling'' for the past month will have to wait to be publicly revealed .

There were signals the 58-year-old was not keen on doing the round of media interviews and that was confirmed by a note from the airline's communications team.

''Greg will be settling into the business for the first few months and won't be carrying out any media interviews during this time.''

He'll front at announcements, including an interim result on February 27 and upcoming 80th anniversary events, but for now Foran is avoiding the limelight and digging deeper into the business.

To climb to the top of the corporate ladder in the US, he is likely a workaholic. And in preparation for his new job, he has been asking for what is bound to be a deluge of feedback from 1200 airline leaders.

That is to help him form a view on where the airline can improve and, crucially, where it goes next. That will be revealed near the start of the next financial year.

During the past month he's been at the airline's head office or operations bases about three days a week – this before being officially on the payroll. Foran's pay package has not yet been disclosed, but will be substantially less than the $21 million a year he reportedly received for managing the 46,000 Walmart and associate stores which employed 1 million staff.

He's apparently been in touch with former chief executives, including Sir Ralph Norris, who steadied the ship after near-collapse in 2001. And he has met or is about to meet unions, with one leader reporting back ''favourably''.

An airline insider says he has also visited uniformed staff at Auckland and Christchurch airports, spending time with the back-of-house ground staff at both airports and learning as much as he can, from baggage handling to loading, flying a sector with pilots and meeting cabin crew.

Air NZ chief executive Greg Foran has joined the airline's Green Team. Photo / Supplied

At Walmart, Foran had a reputation for getting on the shop floor as often as possible – the story goes that he sometimes jetted in without warning on one of the company's private jets.

Fyfe pioneered the push to get executives mucking in on various parts of the business on a regular basis and that approach is back in what's been described as a ''sea change'' over the past two months.

Airline chair Dame Therese Walsh is a hands-on leader and has worked with cabin crew on a recent Auckland-Hawaii flight and a Wellington-Auckland leg. She has told the Herald previously that she wants her fellow board members to get out and about in the airline and that leadership style matches Foran's approach.

He's been furthering his Māori language skills with coaching from the airline's cultural development manager Henare Johnson and was at last weekend's kapa haka festival in Auckland supporting the airline's team.

In a video released when he was announced as chief executive last October, Foran talked a lot about the sustainability push. In an era of flight shaming that's crucial and he has already signed up to the airline's 2000-strong Green Team.

A former colleague who observed Foran's ''legendary'' leadership style says he's not surprised at the glittering CV he has built up.

''He was a bit of a legend to be honest. He was an exceptional leader at the time and from everything I've heard continued to improve,'' said Tourism Holdings chief executive Grant Webster, who used to work with Foran as an executive at Woolworths NZ.

''He had that fascinating ability to listen, to add, and to provide inspiration and direction all at the same time – you walked away from any conversation or presentation feeling you had learned something, been listened to and been motivated,'' Webster said.

But among the airline's 12,500 staff, the survey and the staff meet-and-greet to date have been described as too limited by some workers, who wish to remain anonymous.
 
''They are wary of the new chief executive," said one critic. "They believe that Christopher Luxon made too many cuts to increase the returns on investor capital [and] they believe that due to the cost cutting, Air New Zealand is no longer a 5-star airline and they don't wish to be a 'Walmart of the Sky'.''

Air New Zealand chair Dame Therese Walsh works on a Wellington-Auckland flight. Photo / Supplied.

However, among workers there is hope for future direct engagement with Foran.

''Management filtering of issues upwards has long been an issue in workplaces.''

Pilots say they are looking forward to working with him and finding out what his plans are.

''I understand he has already been spending time meeting Air New Zealand staff around the country – including some of our pilots - and the feedback has been positive,'' said NZ Air Line Pilots Association president Andrew Ridling.

Walsh said she expected Foran to seek input from all of the workforce, beyond the 1200 leaders he's already sought feedback from. She also expected he would seek feedback from a range of customers.

Next week he will begin a 100-day strategic review with the board.

''We expect to go into the August annual result period able to articulate the aspirations for the airline in this next exciting phase,'' said Walsh.

About 200 staff will formally welcome him with a pōwhiri at Te Manukanuka o Hoturoa Marae near Auckland airport next Monday.

Five challenges for Foran

Coping with coronavirus – and whatever else crops up.
Air NZ's direct links to China are limited, with just one daily return service between Auckland (and it already struggles against Chinese mainland carriers). But any worsening of the pandemic and crimping of global air travel leaves Air NZ with its heavy leisure travel weighting especially exposed. Likewise wars, unexpected oil price spikes, large-scale weather events, volcanic eruptions - with many of the airline's fleet of more than 100 planes in the air at any time, the risks are easy to see. Foran will be well versed in crisis management at Walmart, but airlines have many moving parts and a history of facing curveballs that come from further to the left of left field than they do at many other businesses.

Flight shame:
Nearly all airlines are scrambling to deal with this. NZ's remote location that makes it desirable also means a lot of carbon is produced to get here. Air NZ was early aboard the green push and Foran is aware it will need to push harder and faster. This could mean encouraging more weight saving by incentivising passengers to take less luggage, through to more involvement in developing sustainable aviation fuel. This may require Government input and ultimately the solution is more likely to be developed overseas.

Growth – or not:
Predecessor Christopher Luxon was all about pedal to the metal growth – until the last year when network expansion slowed. Does Foran consolidate, let the infrastructure such as lounges catch up to the demands of 17 million passengers a year, concentrate on quality or build the network ahead of the next growth cycle? The airline has several international routes on the drawing board and can activate them within months. More will be revealed around full-year results time in August. No matter what, expect a dispassionate, hard-nosed approach from Foran.

Getting the product right:
New Dreamliners are on order and the new fitout with newly designed seats and cabins is close to sign-off after work in the airline's ''Hangar 22'' development lab. The airline faces intense competition at the front of the plane from other full-service carriers. There are some in-house tweaks already being done to Business Premier cabins and work on developing potentially revolutionary Economy seats – think some form of lie flat(ter). This is the good stuff that airline execs love to unveil.

Playing politics – or not:
Luxon, given his political leanings and aspirations, got painted into a corner by NZ First's Shane Jones, who made easy mileage from beating up the airline up over regional service standards and airfares, which are a classic study in the law of supply and demand and economies of scale – they can be eye-wateringly high. There's no sign of Jones - with the 5 per cent party vote threshold firmly on his radar - changing tack, but Foran would be well advised to sidestep engagement. The airline's Wellington-based and well-connected chair, Dame Therese Walsh, is better placed to deal with the politicians in election year.